FTC Proposal Puts AI Developers at Center of State-Federal Regulatory Conflict

Artificial intelligence (AI) developers could face mounting legal risks if they modify their models’ outputs to comply with state AI laws without clearly informing users. According to a proposed Federal Trade Commission (FTC) policy statement, such undisclosed modifications could violate longstanding federal consumer protection principles. The proposal, issued July 1 in accordance with President Donald Trump’s December executive order, argues that AI companies may violate Section 5 of the FTC Ac